FDIC TE Prep UPDATED ACTUAL Questions and CORRECT
Answers
What is included in tier 2 capital? ALLL up to 1.25% of risk-weighted assets
qualifying preferred stock
Subordinated debt
Qualifying tier 2 minority interest, less any deductions in the tier 2 instrument of an
unconsolidated financial institution.
What is the purpose of the FDIC conducting bank To ensure public confidence in the banking system and to protect the DIF
examinations?
What should examiners do before discussing proposed Contact the regional office to discuss with the CM or the ARD
ratings of a 3 or worse rated bank?
Sections 10(b) and 10(c) of the FDI do what? Empower examiners to make thorough examination of the banks affairs
What is often the single most important factor of a The quality of management
successful operation of an insured institution?
Examination findings, including the composite and Part 309 of the FDIC rules and regs
component ratings, are subject to confidentiality under
which regulation/rule?
When should an examination letter be delivered to the for any bank newly assigned a CAMELS composite 3 or worse
CEO/President during an exit meeting?
Under Section 10(d) of the FDI act, how often must every 12 months
insured branches of foreign banks be examined?
Section 347.211 of the FDIC rule and regs states that 18 months
domestic branches of foreign banks can be considered
for examination every ______ months?
, Limited scope examinations should be performed how 6 months
many months after an enforcement action is issued?
When can examination schedules be extended to 18 ~the bank has total assets of $3 billion or less
months for a state nonmember bank? ~ the bank is well capitalized as defined in 323.403(B)(1) of FDIC rules and regs
~the ban was assigned a management rating of 1 or 2 at the last examination
~the ban was assigned a composite rating of 1 or 2 at the last exam
~the bank is not subject to formal enforcement proceedings or order by the FDIC,
OCC< or FRB
~no person acquired control of the bank during the preceding 12 months in which
the last full-scope examination was completed
Section 10(D)(9) ofthe FDI act requires what? The FFEIC to issue guidelines establishing standards for the purpose of
determining the acceptability of state reports of examination.
How much times notice should a bank be given for notice 2 weeks
of an up coming examination and provided enough time
to complete pre-examination request
How are shared-loss agreements generally written? With the FDIC absorbing 80% of injured losses (up to a stated threshold) and
receives 80 percent of recoveries
How many years are commercial, shared loss agreements 5 years for losses and 8 years for recoveries
generally cover how many years for losses and
recoveries?
For residential mortgages, shared losses agreements 10 years for both
generally cover how many years for losses and
recoveries?
How should an asset covered under a shared loss The assets should be adversely classified (sub, doubt, loss) and be reduced by
agreement be classified? the applicable coverage rate stated in the SLA (often 80% or 95%)
During an exit meeting, management should be made All deficiencies and supervisory recommendations that will be cited in the ROE.
aware of what?
When is a board meeting required? ~36 months or more have elapsed since the last such meeting
~the management component is 3 or worse
~two component ratings are 3 or worse
~or any other CAMEL rating is 4 or 5
What system was devised to rate a Trust department and Uniform Interagency Trust Rating System; composites 1-5.
what composite ratings are established?
What five critical areas are evaluated in a Trust exam? ~management
~operations, internal controls, and audits
~earnings
~compliance
~asset management
Answers
What is included in tier 2 capital? ALLL up to 1.25% of risk-weighted assets
qualifying preferred stock
Subordinated debt
Qualifying tier 2 minority interest, less any deductions in the tier 2 instrument of an
unconsolidated financial institution.
What is the purpose of the FDIC conducting bank To ensure public confidence in the banking system and to protect the DIF
examinations?
What should examiners do before discussing proposed Contact the regional office to discuss with the CM or the ARD
ratings of a 3 or worse rated bank?
Sections 10(b) and 10(c) of the FDI do what? Empower examiners to make thorough examination of the banks affairs
What is often the single most important factor of a The quality of management
successful operation of an insured institution?
Examination findings, including the composite and Part 309 of the FDIC rules and regs
component ratings, are subject to confidentiality under
which regulation/rule?
When should an examination letter be delivered to the for any bank newly assigned a CAMELS composite 3 or worse
CEO/President during an exit meeting?
Under Section 10(d) of the FDI act, how often must every 12 months
insured branches of foreign banks be examined?
Section 347.211 of the FDIC rule and regs states that 18 months
domestic branches of foreign banks can be considered
for examination every ______ months?
, Limited scope examinations should be performed how 6 months
many months after an enforcement action is issued?
When can examination schedules be extended to 18 ~the bank has total assets of $3 billion or less
months for a state nonmember bank? ~ the bank is well capitalized as defined in 323.403(B)(1) of FDIC rules and regs
~the ban was assigned a management rating of 1 or 2 at the last examination
~the ban was assigned a composite rating of 1 or 2 at the last exam
~the bank is not subject to formal enforcement proceedings or order by the FDIC,
OCC< or FRB
~no person acquired control of the bank during the preceding 12 months in which
the last full-scope examination was completed
Section 10(D)(9) ofthe FDI act requires what? The FFEIC to issue guidelines establishing standards for the purpose of
determining the acceptability of state reports of examination.
How much times notice should a bank be given for notice 2 weeks
of an up coming examination and provided enough time
to complete pre-examination request
How are shared-loss agreements generally written? With the FDIC absorbing 80% of injured losses (up to a stated threshold) and
receives 80 percent of recoveries
How many years are commercial, shared loss agreements 5 years for losses and 8 years for recoveries
generally cover how many years for losses and
recoveries?
For residential mortgages, shared losses agreements 10 years for both
generally cover how many years for losses and
recoveries?
How should an asset covered under a shared loss The assets should be adversely classified (sub, doubt, loss) and be reduced by
agreement be classified? the applicable coverage rate stated in the SLA (often 80% or 95%)
During an exit meeting, management should be made All deficiencies and supervisory recommendations that will be cited in the ROE.
aware of what?
When is a board meeting required? ~36 months or more have elapsed since the last such meeting
~the management component is 3 or worse
~two component ratings are 3 or worse
~or any other CAMEL rating is 4 or 5
What system was devised to rate a Trust department and Uniform Interagency Trust Rating System; composites 1-5.
what composite ratings are established?
What five critical areas are evaluated in a Trust exam? ~management
~operations, internal controls, and audits
~earnings
~compliance
~asset management
